Gates can hear cable TV calling

Phone service on way, he says

June 10, 2003|By Barbara Rose, Tribune staff reporter.

Microsoft Chairman and Chief Executive Bill Gates, kicking off a cable industry show in Chicago Monday, said the long-awaited day is coming when cable operators will offer telephone service using the same digital technology that delivers video and e-mail.

"The cable industry will find itself in telephony in a big way," Gates said. "Communications will become a big leg of what supports the ongoing investment" by cable companies in their digital networks.

FOR THE RECORD - This story contains corrected material, published June 11, 2003.

"It will be instant messaging on steroids," he said.

Gates' remarks were part of a wide-ranging panel discussion with top executives of leading cable and entertainment companies to open the annual convention of the National Cable & Telecommunications Association.

The show, expected to draw more than 15,000 people, runs through Wednesday at McCormick Place and showcases high-definition television, an emerging technology the industry is hoping will ignite sales.

Appearing with Gates were Viacom President and Chief Operating Officer Mel Karmazin, AOL Time Warner CEO and Chairman Richard Parsons and Comcast Corp. President and CEO Brian Roberts (this sentence as published has been corrected in this text).

Moderator Lou Dobbs, anchor of CNN's "Moneyline," asked the four whether they consider one another partners or competitors.

"It's a little bit like regime change," Parsons said. "I think of these guys more as partners."

AOL and Microsoft were bitter adversaries until last month, when the pair reached a $750 million settlement in AOL's antitrust suit against the software giant. The companies agreed to collaborate on ways to distribute movies and music using Internet technology, while also solving the industry's piracy problems.

"We could actually all be losers if we don't solve this security problem," Roberts said Monday.

Microsoft on Monday introduced new software designed to run on digital cable-TV boxes to help cable operators promote video-on-demand and other services. Called Microsoft TV Foundation Edition, it includes an interactive program guide that's used by cable operators in Oregon.

Comcast, the country's biggest cable operator, said Monday that it plans to try out the new software. Microsoft has a stake in Comcast from its investment in AT&T Broadband, which Comcast acquired.

Karmazin said he views Comcast and others as "more like partners, but I do look over my shoulder."

But broadband isn't the only way to distribute movies, he added.

"The other method we have for distributing content is called Blockbuster," he said, plugging Viacom's retail chain.